The Market Price of the Stock Doesn’t Matter

The Market Price of the Stock Doesn’t Matter

It actually amazes me that so many of people are completely shocked when they hear that I simply don’t care about the market stock price at the point of purchase or the point of sale on the stock.

Traditional stock investors live and die by the market stock price at either the point of purchase or the point at which they sell the stock. They are only concerned with it the market stock price going up ( going long) or the stock price going down (i.e. shorting the stock).

Either way, these types of investors only make money if the market price goes in the correct direction that they are betting on it going at the point of purchase.

Putting this into the simplest of terms, I make money irrespective of the stocks beginning and ending market price direction. That means if the stock goes up, down, or even sideways in the market, I don’t care. This removes the fear factor of worrying about the price of the stock I’m buying or selling. I am in control of my own destiny in a sense, and I remove the casino gambling factor from trading options.

Options trading courses teach you to buy options that 90% of the time, expire worthless. This is why I’ve been so successful at trading options, because I’m in the business of selling the options that I trade instead of buying them.

Here’s an example of what I do in an average trade. I sell the promise to buy the stock at $70 per share – this is called a “put.” If it drops down to $50 per share, I will still pay $70 per share . Once I have it, I will sell the promise to sell the stock at anything over at $70 per share (and “Lock-in” a profit) – this is called a “covered call.” At no time am I concerned about the market price, unless the stock is going to zero, because I can sell covered calls forever.

This is just a glimpse into the world of options trading as I know it, and live by it – constantly keeping in mind the “Buffet Rule,” of Rule #1: Don’t lose money. Rule#2: See rule number one.